Washington State Acts Against 2 Non-ACA Health Players

Mike Kreidler, the Washington state insurance commissioner, has imposed fines on two health insurance market players in the past two weeks.

Kreidler announced today that Health Plan Intermediaries Holdings LLC, an arm of Health Insurance Innovations Inc., has agreed to pay a $1.5 million fine to resolve allegations concerning its appointments with two insurers, its affiliations with 434 insurance producers, the registration of a “doing business” as name, and the authorization status of some of  the products it sold in Washington state.

Kreidler announced Dec. 30 that he has ordered another organization, Trinity Healthshare Inc., to pay a $150,000 fine, and blocking the organization from operating in Washington state after 2020, in connection with the allegation that Trinity has marketed itself as a health care cost sharing ministry without meeting Washington state’s legal definition of a health care cost sharing ministry.

Resources

• Links to information about Washington state’s action against Health Insurance Innovations Inc. are available here.
• Links to information about Washington state’s action against Trinity Healthshare are available here.
• A link to Health Insurance Innovations’ statement is available here.
• An earlier article about Washington state’s concerns about Trinity Health share is available here.

None of the allegations included in the Health Insurance Innovations order or the Trinity Healthshare order seems to involve a failure to pay the promised benefits.

In each order, an executive from the targeted company acknowledges that the company has consented to entering into the order.

Company Responses

Health Insurance Innovations — a Tampa, Florida-based company that has been best known as a seller of a short-term health insurance and supplemental insurance products, such as dental insurance and vision benefits — noted in a response that, in December, the company announced it would be shifting toward sales of Medicare plans, and away from other types of plans. Health Insurance Innovations calls its non-Medicare business its “individual and family plan” (IFP) business.

“In light of the previously announced de-emphasis of our IFP business, we made a strategic decision to settle this legacy matter with Washington rather than continue with a time-consuming and costly legal process that we don’t believe would benefit our stakeholders,” Gavin Southwell, Health Insurance Innovations’ president, said in the settlement announcement.

Health Insurance Innovations paid $3.4 million to resolve a 42-state state insurance regulator investigation in 2018. Washington state says it opted out of that settlement.

Trinity Healthshare said in a response to the Trinity Healthshare order that the order will let Trinity to continue to facilitate health care sharing among its current Washington members through 2020.

Trinity Healthshare also noted that the organization is organized under Section 501(c)(3) of the Internal Revenue Code as a non-profit health care sharing ministry.

“Trinity connects members with health care sharing needs with members who are willing to share with and support them in their time of need,” Trinity said. “Earlier this year, the Washington insurance commissioner issued an ex parte order directing Trinity to stop selling its sharing programs to Washington residents. The order, however, allowed Trinity to continue to facilitate sharing among its current Washington Members. Trinity requested an administrative hearing to dispute and rectify the allegations made in the order.

“Unfortunately, the Washington commissioner made it clear from the beginning that he was not interested in allowing Trinity to operate in Washington because of Trinity’s prior agreement with a service provider that the commissioner disfavors. Trinity is disappointed that the commissioner jumped to the conclusion that Trinity’s health care sharing ministry is not providing a valuable and meaningful service to its members without first discussing, much less validating a single complaint with Trinity.

“Trinity was prepared to defend its operation’s compliance with Washington law, but once we requested a hearing to do so, the Office of the Insurance Commissioner offered to discuss a consent order that would resolve the dispute without spending valuable member resources by litigating with a commissioner who is hostile to the valuable health care sharing alternative to spiraling health care premiums that conventional insurers have imposed on Washington citizens for decades. Trinity agreed to the consent order without admitting any wrongdoing or noncompliance with Washington law. As a result of the consent order, Trinity will unfortunately stop offering its health care sharing option in Washington at the end of 2020. At Trinity we are committed to our members and will continue to facilitate sharing among current Washington members through 2020.”

The Background

Starting in January 2014, the Affordable Care Act of 2010 began to require major medical insurance policies for individuals and families to meet many ACA benefits and underwriting requirements. An issuer of individual major medical coverage must, for example, cover at least about 58% of the actuarial value of a basic ”essential health benefits” package for all insureds, aside from some users of catastrophic health coverage.